South Korea’s $10 Billion SK Hynix Leveraged ETF Selloff Triggers Retail Margin Liquidations
Assets in South Korean leveraged exchange-traded funds tracking memory chipmakers have shed more than $10 billion, or 35%, since peaking in June. The three largest funds dedicated to SK Hynix dropped more than 55%, briefly falling below $10 billion in combined assets. The funds use swaps and options to maintain daily exposure, forcing fund managers or swap counterparties to sell additional shares as the underlying stock price falls.
The fund liquidations accompanied a sharp pullback in Samsung and SK Hynix, which fell 35% and 28% from June highs and pushed the KOSPI index into a bear market. Retail investors saw 1.2 million accounts trigger margin calls, with brokers forcibly liquidating between 320,000 and 360,000 positions. The selloff triggered the market's eighth circuit breaker this year and coincided with a technical correction in Japan's Nikkei 225 index and a 20% drop in the U.S. semiconductor sector. Regulators are preparing to raise minimum deposit requirements for single-stock leveraged funds to curb volatility.
From the sources (25 posts)
@globalmktobserv‼️Foreign investors are precipitously selling Korean equities: Global investors have dumped nearly -$10 BILLION in Korean stocks so far in July. This follows -$30 billion in outflows in June, the largest monthly outflow on record. Since
@globalmktobserv⚠️Foreign investors have never SOLD this much South Korean stock: Foreign net equity outflows from South Korea have exceeded -$100 billion year-to-date, dwarfing every prior year on record since at least 2020. TAP IMAGE TO SEE FULL INSIGH
@steve_hankeForeign investors pulled a net $46B from emerging market equities in June. South Korea led the way, with a net $30B outflow. That's the highest monthly outflow in more than 25 years. No wonder the won is TANKING and is near its 2009 lows.
@globalmktobserv🚨MARKET CARNAGE IN KOREA IS INTENSIFYING: The KOSPI fell -9% on Monday, triggering a trading halt for the 7th time this year, out of 13 total since 2000. TAP IMAGE TO SEE FULL INSIGHT👇
@firstsquawkSEOUL'S KOSPI SURGES 6%
@firstsquawkKOREA EXCHANGE ACTIVATES SIDECAR ON KOSPI AFTER KOSPI 200 FUTURES SURGE 5%; PROGRAMME TRADING HALTED FOR 5 MINUTES
@firstsquawkKOREA EXCHANGE ACTIVATES SIDECAR ON KOSDAQ FOLLOWING KOSDAQ 150 FUTURES SURGE OF 6%; PROGRAMME TRADING SUSPENDED FOR 5 MINUTES
@openoutcrierRT @JaguarAnalytics: KOSPI halted because stocks are rising too fast, last up +5% after 15 minutes into trading session.
@bulltheoryioOver ₩396,500,000,000,000 ($266 BILLION) has been added to the South Korean stock market as the KOSPI surged +6.5%. A buy-side sidecar has been triggered, halting program buying for 5 minutes. SK Hynix surged +11.5%, while Samsung gained
@cryptoroverKOREAN STOCKS ARE EXPLODING 🚀 🇰🇷 KOSPI just added ₩380 trillion in a single day. Samsung surged 6.46% SK Hynix jumped 11.19% The entire Korean market turned green.
@bulltheoryioBREAKING: South Korean stock market triggered a circuit breaker as KOSPI surged +8.2%. Korean Exchange (KRX) halted all stock trading and program trading for 20 minutes.
@cryptorover🚨 Asian markets are trading like a meme coin. Yesterday, KOSPI triggered a circuit breaker and program selling was disabled for 5 minutes, in the third largest crash since the Lehman crisis. Today, KOSPI surged 8.29% and another circuit b
@businessSouth Korea’s AI-fueled stock boom is turning into a cautionary tale of what happens when leverage becomes a more powerful market force than the fundamentals. Read more: 📷️: SeongJoon Cho/Bloomberg
@cryptoroverSOUTH KOREA'S RETAIL INVESTORS ARE GETTING WIPED OUT. On July 13, SK Hynix crashed 15.4% in Seoul, dragging KOSPI down 8.95%, its third-worst session since Lehman. Trading was halted twice. Over 1.2 million leveraged accounts triggered
@barchartSouth Korean President says his country's stock market is unstable 🚨 Ya don't say? 🤣
@cryptoroverTHIS IS GETTING DANGEROUS. 🚨 South Korea's President just admitted the stock market is "quite unstable." He says the recent rally was unlike anything seen before. Now he expects more volatility. His government has ordered regulators to
@bulltheoryioBREAKING: South Korea's president just called the country's own stock market "unstable" after days of extreme volatility. President Lee Jae Myung said Korea's market surged in an unprecedented way and now needs time to stabilize. This fol
@macroedgeresKOSPI Plunges 5%, Triggers Sell-Side Sidecar on Korea Exchange #MacroEdge
@firstsquawkSouth Korea Regulator to Introduce New Measures for Single-Stock Leveraged ETFs Shortly
@macroedgeresKorea’s flagship KOSPI index halted after index plummets 7% #MacroEdge
@globalmktobserv‼️Foreign investors are precipitously selling Korean equities: Global investors have dumped nearly -$10 BILLION in Korean stocks so far in July. TAP IMAGE TO SEE FULL INSIGHT👇
@polymarketJUST IN: South Korea prepares new measures for single-stock leveraged ETFs, calling them “high-risk” products.
@globalmktobserv🚨SOUTH KOREA BEAR MARKET SHOWS NO SIGNS OF EASING: The KOSPI dropped as much as -7.6% intraday Thursday before paring losses to close down -6.4%, with Samsung falling -8.2% and SK Hynix plunging -11.6%. The KOSPI also triggered another ci
@firstsquawkSOUTH KOREA TO TEMPORARILY HALT NEW SINGLE STOCK LEVERAGED ETFS
@firstsquawkS. KOREA FSC: TO CONSIDER ADDITIONAL STEPS BASED ON MARKET IMPACT